Gold Pares Gains After Fed
Gold prices pared early gains to trade little changed around $4,300 an ounce on Wednesday as traders digested the Fed’s latest monetary policy decision. The central bank raised the federal funds rate by 25bps, as expected, and signalled at least one more rate hike this year to curb persistently high inflation. Meanwhile, the Bank of England is expected to leave borrowing costs unchanged tomorrow, while the Bank of Japan is set to raise rates on Friday. Last week, the ECB raised borrowing costs for the second time this year. Oil prices retreated today, but the situation in the Middle East remains fragile, keeping supply risks elevated. The continued energy shock is expected to add further pressure to inflation and could prompt additional monetary tightening.
Gold prices pared early gains to trade little changed around $4,300 an ounce on Wednesday as traders digested the Fed’s latest monetary policy decision. The central bank raised the federal funds rate by 25bps, as expected, and signalled at least one more rate hike this year to curb persistently high inflation. Meanwhile, the Bank of England is expected to leave borrowing costs unchanged tomorrow, while the Bank of Japan is set to raise rates on Friday. Last week, the ECB raised borrowing costs for the second time this year.
Oil prices retreated today, but the situation in the Middle East remains fragile, keeping supply risks elevated. The continued energy shock is expected to add further pressure to inflation and could prompt additional monetary tightening.